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Overall prices for 'prime' central London homes increased by just 0.5 per cent in the year to April from 0.8 per cent, according to Knight Frank.

This is the lowest rate in six and a half years and means annual growth has been below five per cent for 16 consecutive months.

Tom Bill, head of London residential research at the agent, said: "To put that into perspective, annual growth did not exceed five per cent for 17 months in the period preceding and following the collapse of Lehman Brothers."

The three per cent stamp duty surcharge on landlords and investors, which came into force on April 1, helped slashed the amount of transactions taking place by around half.

Buyers have now become much more "price-sensitive" and are taking taking much longer to make offers, said the estate agent.